The papillomaviruses are small DNA tumor viruses which cause benign and malignant lesions of squamous epithelia in higher vertebrates. The complete lytic cycle of these viruses occurs only in the differentiated keratinocytes of a squamous epithelium. Bovine papillomavirusus type 1 (BPV-1) was used as a model system for the study of the regulation of papillomavirus gene expression by keratinocyte differentiation. In situ hybridization studies using mRNA specific probes have demonstrated that this regulation is both transcriptional and posttranscriptional. Transfection studies using mini-late transcription unit expression vectors have demonstrated that RNA processing changes which occur in the granular layer of the wart are essential for the early to late shift in viral expression. A cis-acting regulatory element which inhibits BPV-1 late gene expression has been identified in the late 3' untranslated region (UTR). Mutational analysis of this element indicated that a consensus 5' splice site sequence is essential for its function. In addition, base pairing between this element and the U1 smRNA, which normally base pairs with 5' splice sites during splicing, is necessary for the activity of the element. This element, however, does not appear to be used for splicing and most likely functions by inhibiting polyadenylation at the late poly(A) site. A similar inhibitory element has also been identified in the HPV-16 late 3' UTR. The HIV-1 Rev protein, which interacts with cellular splicing machinery to facilitate the nucleocytoplasmid transport of unspliced HIV mRNAs, was able to reverse the effects of the BPV-1 3' UTR element on expression from a vector which also contained a Rev binding site (RRE). This suggests that the activity of the 3' UTR element could be regulated by a viral or cellular Rev-like protein.